Ex-Celsius CEO Alex Mashinsky Faces Financial Freeze By U.S. Court Amid Ongoing DOJ Investigation


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The post Ex-Celsius CEO Alex Mashinsky Faces Financial Freeze By U.S. Court Amid Ongoing DOJ Investigation appeared first on Coinpedia Fintech News

Alex Mashinsky, the former CEO of the cryptocurrency lending platform Celsius, has had his assets frozen by a U.S. court. The decision comes as part of an ongoing criminal investigation led by the Department of Justice (DOJ). The freeze includes corporate bank accounts and a property in Texas, all of which have been rendered untouchable since Mashinsky’s arrest in July.

Alex Faces Financial Freeze

In a significant legal development, a U.S. federal judge has granted a motion from the Department of Justice to freeze specific bank accounts and real estate assets linked to Alex Mashinsky, the former CEO of cryptocurrency lending platform Celsius. The decision was formalized in a filing dated September 5, in the U.S. District Court for the Southern District of New York. The judge approved the unsealing of a restraining order that directly impacts Mashinsky’s financial holdings.

The Justice Department’s action led to the freezing of multiple bank accounts across various financial institutions. Accounts held at Goldman Sachs and Merrill Lynch, registered under the names of holding companies associated with Mashinsky, were among those affected. Additionally, personal accounts at First Republic Securities, SoFi Bank, and SoFi Securities, all under Mashinsky’s name, were also frozen as part of the court’s ruling.

Additionally, Mashinsky’s residential property in Austin, Texas, has also been included in the asset freeze. The property, which Mashinsky purchased jointly with his wife Kristine in 2021, had been on the market for over a year. Interestingly, the house was listed for sale around the same time that Celsius filed for bankruptcy in July 2022.

In July, Alex Mashinsky, a co-founder of the lending platform Celsius, was taken into custody on several charges, among them securities fraud and manipulation of the company’s native CEL token. Mashinsky has entered a plea of not guilty, and his legal team has characterized the allegations against him as “unfounded.”

CEL Token Plunges Following The News

Authorities claim that Mashinsky enticed investors to funnel billions of dollars into Celsius by presenting it as a contemporary banking alternative where customers could securely deposit their cryptocurrency assets and earn interest.

Also, Celsius employed funds from some of its customers to artificially influence the market for its native cryptocurrency token, CEL. According to prosecutors, this manipulation enabled Celsius to offload its own CEL holdings at prices higher than the token’s actual market value.

Currently under the management of a restructuring team headed by ex-JPMorgan Chase banker Chris Ferraro, Celsius has acknowledged its role in the scam, as per a non-prosecution agreement with the Department of Justice.

Mashinsky secured his release in July through a $40 million bond. The prosecution has indicated that they will require approximately six to eight weeks to compile evidence, which includes scrutinizing Mashinsky’s online videos where he is accused of deceiving investors.

Following the news, CEL has plunged slightly over the last hour.